Precious Metals Complex: The Big Picture

From the March 23rd low in the PM complex, we’ve enjoyed the first easy part of this rally that should have many years to run yet. Every bull market will consist of an impulse move followed by a consolidation period, rinse and repeat until the bull market ends with some type of reversal pattern. Normally in a secular bull market, the turning points will generally be very large to buildup the energy to advance to new highs.

The current 2nd leg up in the secular PM complex bull market actually began in January of 2016 after the first leg up ran from 2000 to 2011. There was a cyclical bear market within the secular bull market that ran from 2011 high to the January 2016 low. It’s important to understand which part of a bull market one is in as to not get confused on what may lay ahead.

Tonight I would like to show you some long term quarterly line charts that I use when looking for big chart patterns that usually show up at important long term reversal points that can take years to complete. I usually only post these charts just a couple of times a year as change comes very slowly but when change does come it’s important to pay close attention because the change usually represents a major trend change.

Keep in mind when looking at these long term quarterly line charts that only the quarterly closing price is used which makes the chart patterns not very symmetrical looking. When I do spot a long term chart pattern on the quarterly line chart I will switch it over to a bar chart which will make the patterns a little more clear. Again, it is the major trend we want to trade with unlike a salmon swimming upstream using up all of its energy before it reaches the spawning grounds.

When looking at these charts to follow we still have over 3 weeks of trading yet before these quarterly line charts complete their 2nd quarter results which will then be put into stone. Also, since these are line charts you will be able to see more clearly reverse symmetry. How stock goes down is often how it can go back up over that same area, which can play an important role in understanding the potential sweet spots where the price action can easily move with little in the way of resistance.

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